A Presentation on

Government budget and economy

 Prepared by
 Shiwali Agrawal
 (PGT Economics
 Sunbeam Suncity)
French word – Bougette
(which means Leather bag)
 Halwa party
In india budget is presented on 1st february
 BUDGET
 It is an annual statement of estimated
receipts and expenditure of government
during a fiscal year
OBJECTIVES OF GOVT BUDGET
 1. Reallocation of resources
 2. Reduction of inequalities of income &

wealth
 3.Economic Stability
 4. Reducing regional disparity
 5.Managing PSEs
 6. Promoting economic growth
Economic stability
 Inflation means
 Increase in price
 It happs :
Demand> supply
 Demand has to be
reduced
 So Tax will be increased
 Expenditure will be
reduced
 Surplus budget
 Deflation means
 Decrease in price
 It happs:
 Demand < supply
 Demand has to be increased
 So Tax will be decreased
Expenditure will be increased

 Deficit budget
Promoting economic growth
 Increase in GDP
 Promotes saving and investment
 Govt itself does production
 Improves infrastructural facilities
 Budget

R eceip t Exp endi tur e

Revenue receipt Capital receipt Revenue Exp Capital Exp

Budget
 Receipts  Expenditure

 Monthly income (reg)

 Cons’n exp (reg)

 Repayment of loan (dec

 Loan (inc liab)
liab)
 Sale of property (dec  Purchase of property
asset) (inc asset)
 Receipts
 Revenue receipts  Capital receipts
 Those receipts of  Those receipts of

the govt which the govt which

neither create either create
liabilities nor liabilities or
decreases assets of decreases assets of
the govt the govt
 Expenditure
 Revenue Exp  Capital Exp
 Those expenditure  Those expenditure

of the govt which of the govt which

neither decreases either decreases the
the liabilities nor liabilities or
increases the assets increases the assets
of govt of govt
 Revenue- neither nor
 Capital- either or
 Receipts- inc in liab & dec in

assets
 Exp- dec in liab & inc in assets
 Budget

Receipts Expenditure

Revenue Capital
Tax Non Tax
Revenue Capital
Debt creating Non Debt Creating
 TAX
 It refers to compulsory payment made by
public to the govt gainst which there is no
direct quid pro quo
 TAX
 Direct Tax
 Imposed on income
and wealth
 Impact and incidence
lies on same person
 Burden can’t be shifted
 Generally progressive
in nature
 limited coverage
Ex- Income tax, Corporate tax,
wealth tax
 Indirect Tax
 Imposed on goods and
services
 Impact and incidence
lies on different person
 Burden can be shifted
 Generally regressive in
nature
 Wider coverage
Ex-Sales tax, custom duty,
excise duty,GST